International Journal on Leadership

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Effect of Strategic Orientations on Organizational Performance: Evidence from Top Management of a Private Bank in Ethiopia


Affiliations
1 MBL Graduate, Addis Ababa University, Ethiopia
2 Assistant Professor, Addis Ababa University, Ethiopia
3 Associate Professor of Management, Addis Ababa University, Ethiopia
     

   Subscribe/Renew Journal


This study examined the effect of strategic orientations (market, entrepreneurial, learning, and technological orientations) on organizational performance in the case of Addis International Bank, Ethiopia (an emerging economy). The study employed explanatory research design and quantitative research approach. Data were collected from 105 survey respond dents using self-administered questionnaire. Descriptive and correlation analyses, followed by multiple linear regression analysis, were used to test the hypotheses stated and answer the research questions. The findings of the study revealed that there is a strong and positive effect of entrepreneurial and technological orientations on organizational performance whereas market and learning orientations didn’t have significant effect on organizational performance. Thus, to make these latter strategic orientations add value to the bank, it has to make co-alignment in strategy, structure, processes, and culture. Therefore, it is recommended that the Bank shall fully implement and configure strategic orientations as a source of competitive advantage and, thereby, achieve superior performance. Prior studies were made on strategy as a process and each construct individually. These findings contribute to the theory and practice of strategy and management by integrating all the strategy orientations together and providing recorded evidence from an emerging economy perspective.

Keywords

Strategic Orientations, Organizational Performance, Addis International Bank, Ethiopia, Emerging Economy
Subscription Login to verify subscription
User
Notifications
Font Size


  • Ahmed, A., & Othman, I, L., (2017).The Impact of strategic attributes on organizational performance in Pakistan banking sector: A review and suggestions for future research. International Journal of Academic Research in Business and Social Sciences, 7(8), 371-387.

  • Ahmed, A., Khuwaja, F. M., Brohi, N. A., & Othman, I. B.L. (2018). Organizational factors and organizational performance: A resource-based view and social exchange theory view point. International Journal of Academic Research in Business and Social Sciences, 8(3), 579-599.

  • Faisal, A., Hermawan, A., & Arafah, W. (2018). The influence of strategic orientation on firm performance mediated by social media orientation at MSMEs. International Journal of Science and Engineering Invention, 4(8), 22-31.

  • Baker, W. E., & Sinkula, J. M. (1997). The synergetic effect of market orientation and Learning orientation on organizational performance. Journal of the Academy of Marketing Science, 27(4), 411-427.

  • Balodi, K. C. (2014). Strategic orientation and organizational forms: An integrative framework. European Business Review, 26(2), 188-203.

  • Bapat, D. (2017). Linking strategic orientation with performance: Implication for Indian banks.

  • StrategicChange, 26, 403-411. Retrieved from https://doi.org Beliaeva, T. (2019). Complementary and contextualization of firm level strategic orientation. LappeenrantaLahti University of Technology, LUT University Press, 9-173.

  • Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Hillsdale, NJ: Lawrence Erlbaum Associates, Publishers.

  • Creswell, J. W. (2009). Research design: Qualitative, quantitative, and mixed methods approaches (3rd ed.). Thousand Oaks, CA: Sage Publications.

  • Dutta, D. K., Gupta, V. K., & Chen, X. (2016). A tale of three strategic orientations: A moderated-mediation framework of the impact of entrepreneurial orientation, market orientation, and learning orientation on firm performance. Journal of Enterprising Culture, World Scientific Publishing Company, 24, 313-348.

  • Faiz, G. A. I. (2015). The mediating effect of market orientation on the relationship between total quality management, entrepreneurial orientation and the performance of banks in Libya (Unpublished).

  • Faiz, G. A., & Ahmad, F. (2015). The effect of entrepreneurial orientation on the organizational performance: A study on banks in Libya. The Journal of Social Sciences Research, 1(3), 25-31.

  • Ferdous, A. S., & Polonsky, M. (2011). Organizational internal market orientation (IMO): Developing an integrative framework. In ANZMAC 2011 Conference proceedings: Marketing in the Age of Consumerism: Jekyll or Hyde? pp. 1-9. ANZMAC, Perth W. A.

  • Gatignon, H., & Xuereb, J. M. (1997). Strategic orientation of the firm and new product performance. Journal of Marketing Research, 34, 77-90.

  • Hakala, H. (2015). Entrepreneurial strategy orientation. Journal of Economics, Business and Management, 3(2), 212-214.

  • Hakala, H. (2011). Strategic orientation in management literature: Three approaches to understating the interaction between market, technology, entrepreneurial and learning orientations. International Journal of Management Reviews, 13(2), 199-217.

  • Hakala, H., & Kohtamaki, M. (2011). Configurations of entrepreneurial, customer, and technological orientation: Differences in learning and performance of software companies. International Journal of Entrepreneurial Behavior & Research, 17(1), 64-81.

  • Halac, D. S. (2015). Multidimensional construct of technological orientation. Procedia - Social and Behavioral Sciences, 195, 1057-1065. Elsevier Ltd.

  • Retrieved from http://creativecommons.org/licenses/ by-nc-nd/4.0/ Han, J. K., Kim, N., & Srivastava, R. K. (1998). Market orientation and organizational performance: Is innovation a missing link? Journal of Marketing, 62(4), 30-45. Research Collection Lee Kong Chian School of Business.

  • Heale, R., & Twycross, A. (2015).Validity and reliability in quantitative studies, Research made simple, 18(3), 66-67. Retrieved from http://ebn.bmj.com

  • Hult, G. T. M., Hurley, R. F., & Knight, G. A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429-438.

  • Hongming, X., Changyong, L., & Chunhui, C. (2007). Relationships among market orientation, learning orientation, organizational innovation and organizational performance: An empirical study in the pearl river delta region of China. Front. Bus. Res. China, 1(2), 222-253.

  • Hussain, J., Khan, M. A., & Nassir, A. (2013). The impact of market orientation on organizational performance: Empirical evidence from banking sector of Pakistan. Sarhad Journal of Management Sciences, 3(2), 232-239.

  • Ibrahim, M. A., & Shariff, M. N. M. (2016). Mediating role of access to finance on the relationship between strategic orientation attributes and SMEs performance in Nigeria. International Journal of Business and Society, 17(3), 473-496.

  • Innocent, O. (2015). The performance of commercial banks: The role of organizational culture as a mediator and external environment as a moderator (Unpublished doctoral dissertation). Universiti Utara Malaysia.

  • Kaliappen, N., & Himan, H., (2014). Building strategic business model through underpinning theories. International Journal of Management Research and Review, 4(3), 327-333.

  • Kerdpitak, C., & Boonrattanakittibhumi, C. (2020). Effect of strategic orientation and organizational culture on firm‘s performance. Role of organizational commitments. Journal of Security and Sustainability, 9, 70-82.

  • Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct research positions, and management implications. Journal of Marketing, 54, 1-18.

  • Krzakiewicz, K., & Cyfert, S. (2019). Strategic orientations of the organization - Entrepreneurial, market and organizational learning. Management, 23(1), 7-19.

  • Lavrakas, P. J. (2008). Sample design. Encyclopedia of survey research methods. Sage Publication, Retrieved from http://dx.doi.org/10.4135/9781412963947.n503

  • Lelisa, T. B. (2014). The determinants of Ethiopian commercial banks performance. Euorpean Journal of Business and Management, 6(14), 52-62.

  • Lonial, S. C., & Carter, R. E. (2015). The impact of organizational orientations on medium and small firm performance: A resource-based perspective. Journal of Small Business Management, 53(1), 94-113.

  • Long, H. C. (2013). The relationship among learning orientation, market orientation, entrepreneurial orientation, and firm performance of Vietnam marketing communications firms. Philippine Management Review, 20, 37‐46.

  • Lumpkin, G., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. The Academy of Management Review, 21(1), 135-172.

  • Mekonnin, R. (2014). Customer orientation and business performance of financial institution: A case study of Eastern Hararghe Commercial Bank of Ethiopia. Management Studies and Economic Systems (MSES), 1(4), 257-265.

  • Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman, H. J. (1978). Organizational strategy, structure, and process, The Academy of Management Review, 3, 546-562. Retrieved from http://dx.doi.org

  • Mooi, E., Sarstedt, M., & Mooi-Reci, I. (2018). Regression analysis, in market research. Springer Texts in Business and Economics, Springer, Singapore.

  • Obeidat, B. Y. (2016). The effect of strategic orientation on organizational performance: The mediating role of innovation. International Journal of Communications, Network and System Sciences, 9, 478-505. Retrieved from http://www.scirp.org/ journal/ijcns

  • Okoroagu, A., Nnabugwu, E. L., & Rejoice, O. E. (2019). The effect of strategic orientation on performance of selected manufacturing firms in Enegu state, Nigeria. International Journal of Advanced Research in Management and Social Sciences, 8(9), 49-69.

  • Olson, E. M., Slater, S. F., Hult, G. T. M., & Olson, K. M. (2018). The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation. Industrial Marketing Management, 69, 62-73. Retrieved from https://doi.org/10.1016/j.indmarman.2018.01.029

  • Oslon, E. M., Slater, S. F., & Hult, G. T. M. (2005). The performance implications of fit among business strategy, marketing organization structure, and strategic behavior. Journal of Marketing, 69, 49-65.

  • Papulova, E., & Papulova, Z. (2006). Competitive strategy and competitive advantages of small and midzised manufacturing enterprises in Slovakia (pp. 1-8). E-Leader, Slovakia.

  • Porter, M. E. (1985). Competitive advantage, creating and sustaining superior performance. The Free Press, New York, London, Toronto Sydney, Tokyo, and Singapore.

  • Pratono, A. H., (2016). Strategic orientation and information technological turbulence. Business Process Management Journal, 22(2), 368-382.

  • Richard, D. U. D., & Kristaung, R. (2018). The effect of strategic orientation and dynamic capability in turbulent environment on commercial bank performance in Indonesia with corporate social responsibility as moderating variable. The International Journal of Business & Management, 6(1), 101-111.

  • Rizzo, A. (2011). Strategic orientation and organizational performance of small firms in Malta: A grounded theory approach (Unpublished). Retrieved from http://openair.rgu.ac.uk

  • Rani, D. M. S., & Zergaw, L. N. (2017). Bank specific, industry specific and macroeconomic determinants of bank performance in Ethiopia. International Journal of Advanced Research in Management and Social Sciences, 6(3), 74-96.

  • Slater, F., & Narver, C (2000). The positive effect of a market orientation on business profitability: A balanced replication. Journal of Business Research, 48, 69-73. Elsevier Science Inc.

  • Slater, F., & Narver, C. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20-35. Retrieved from http://www.jstor.org/stable/1251757

  • Suliyanto & Rahab. (2012). The role of market orientation and learning orientation in improving innovativeness and performance of small and medium enterprises. Asian Social Science, 8(1), 134-145.

  • Tosi, H. L., & Slocum, J. W. (1984). Contingency theory: Some suggested directions. Journal of Management, 10(1), 9-26.

  • Tsai, K. H. (2004). The impact of technological capability on firm performance in Taiwan’s electronics industry. Journal of High Technology Management Research, 15(2004), 183-195.

  • Venkatraman, N. (1989). The concept of fit in strategy research: Toward verbal and statistical correspondence. The Academy of Management Review, 14(3), 423-444.

  • Weinzimmer, L. G., Robin, J., & Michael, Eric. J. (2012). The measurement of strategic orientation and its efficacy in predicting financial performance. Journal of Business Strategies, 29(2), 81-99.

  • Winlund, J., & Shephered, D. (2005). Entrepreneurial orientation and small business performance: A configurationally approach. Journal of Business Venturing, 20, 71-91.

  • Zaidatol, A. L., & Bagheri, A. (2009). Entrepreneurship as a center choice: An analysis of entrepreneurial self- efficiency and intention of university student. European Journal of Social Science, 9(2), 338-349.

  • Zhou, K. Z., & Li, C. B. (2010). Howstrategic orientations influence the building of dynamic capability in emerging economies. Journal of Business Research, 63, 224-231. Retrieved from http://dx.doi.org/10.1016/j.jbusres.2009.03.003

  • Zhou, K. Z., & Li, C. B. (2007). How does strategic orientation matter in Chinese firms? Asia Pacific Journal of Management, 24(4), 447-466.


Abstract Views: 224

PDF Views: 0




  • Effect of Strategic Orientations on Organizational Performance: Evidence from Top Management of a Private Bank in Ethiopia

Abstract Views: 224  |  PDF Views: 0

Authors

Endeshaw Azaj
MBL Graduate, Addis Ababa University, Ethiopia
Mengistu Bogale Ayele
Assistant Professor, Addis Ababa University, Ethiopia
Worku Mekonnen
Associate Professor of Management, Addis Ababa University, Ethiopia

Abstract


This study examined the effect of strategic orientations (market, entrepreneurial, learning, and technological orientations) on organizational performance in the case of Addis International Bank, Ethiopia (an emerging economy). The study employed explanatory research design and quantitative research approach. Data were collected from 105 survey respond dents using self-administered questionnaire. Descriptive and correlation analyses, followed by multiple linear regression analysis, were used to test the hypotheses stated and answer the research questions. The findings of the study revealed that there is a strong and positive effect of entrepreneurial and technological orientations on organizational performance whereas market and learning orientations didn’t have significant effect on organizational performance. Thus, to make these latter strategic orientations add value to the bank, it has to make co-alignment in strategy, structure, processes, and culture. Therefore, it is recommended that the Bank shall fully implement and configure strategic orientations as a source of competitive advantage and, thereby, achieve superior performance. Prior studies were made on strategy as a process and each construct individually. These findings contribute to the theory and practice of strategy and management by integrating all the strategy orientations together and providing recorded evidence from an emerging economy perspective.

Keywords


Strategic Orientations, Organizational Performance, Addis International Bank, Ethiopia, Emerging Economy

References